by J. Orlin Grabbe

(continued from Part 37)

What answers Jim Leach's House Committee on
Banking and Financial Services received from the
National Security Agency's (NSA's) Inspector General is
not known, but apparently the NSA stonewalled the
investigation. On July 23, 1995, Gregory Wierzynski
emailed me, asking "Do you have suggestions on how we
could verify some of the elements in the Norman story?
I've talked to Chuck in Kentucky and am still in touch
with him. But his stories have not panned out, even
partially. I would be most interested in your ideas." I
found this statement remarkable, and knew that
Wierzynski was being deliberately obtuse. Moreover,
neither I--nor anyone else of my acquaintance--had told
Wierzynski that I was talking to Chuck Hayes in Nancy,
Kentucky.

Jim Norman had first suggested that I call Hayes--
had even implied that Hayes wanted me to call--but
initially I had been reluctant to do so. There were enough
people trying to get me off the Internet, and I was dubious
of the motives of an ex-intelligence operative. But when I
finally did so, we spent a hour and twenty minutes on the
phone in a wide-ranging conversation about money-
laundering. I jumped around from topic to topic, bringing
up numerous obscure connections between the
intelligence community and banking. In each case Hayes
was right there with me, adding details to what we were
discussing. From time to time I would make deliberate
mis-statements to see if Hayes would catch the
discrepancies. He did. By the end of the conversation it
did not matter to me whether Chuck Hayes was just a
hillbilly Kentucky junk dealer or an ex-member of CIA's
division D. His knowledge spoke for itself. He had an
intimate acquaintance with banking wire transfers, bank
computer operations, and banking-intelligence
connections, as well as detailed insights into current
hidden money-laundering channels.

Hayes was already familiar with my article The
End of Ordinary Money. He said he had gotten his copy
from the CIA library. The CIA had apparently either
downloaded it from the Internet, or perhaps had obtained
it through Robert Steele. Eric Bloodaxe, a.k.a. Chris
Goggans, an ex-Legion of Doom member who edited a
hacker publication called Phrack, had suggested I sent
copies to Winn Schwartau of Information Warfare fame,
and to Robert Steele, whose company Open Source
Solutions, Inc., published a newsletter entitled OSS
Notices, which advocated some radical changes to the
process of intelligence collection. Steele had reviewed
them as follows: "J. Orlin Grabbe has produced the first
two in a series of three papers on digital cash, and I found
them both educational and provocative. . . . He
approaches the matter from a civil libertarian/civil
disobedience perspective, and I find his perspective on the
history of U.S. policy and technology, as well as the
alternatives, well-worth review. This is a thoughtful
popular perspective on issues of electronic privacy which
bears on both the protection of intellectual property and
electronic civil defense" (OSS Notices, vol. 3, issue 5,
May 31, 1995).

Chuck and I had some differences, to be sure.
Hayes was spending much of his time tracking drug-
money laundering through the U.S. financial system. I
looked at the War on Drugs from an economic
perspective: supply restriction leading to vast profit
margins, with concomitant political payoffs and political
corruption, while in the meantime prisons were being
over-crowded with casual drug users. It was an exercise
in insanity. Nor was I a fan of the DEA, with its record of
civil rights violations. Hayes, by contrast, liked the DEA
for their street smarts, which contrasted with the desk-
level bureaucrats he was somewhat contemptuous of at
the CIA. But Hayes was gunning for the people at the top
of the drug-dealing and money-laundering pyramid, and
this was fine with me. There was a close association
between those administering the War on Drugs, and those
profiting from it. In the case of money-laundering, it was
even more blatant: it was hard to differentiate the money
launderers from those that administered the money-
laundering laws. I did not approve of the money-
laundering laws themselves with their invasions of
personal financial privacy. But on the other hand, hoisting
government junkies on their own petard did not perturb
me. Over a period of time, Hayes and I developed an
information-sharing arrangement.

Hayes was at the moment following the financial
flows through Arkansas financial institutions, as well as
through Mellon Bank in Pittsburgh. Also involved were
New York banks, some members of the Chicago
Mercantile Exchange, and at least one important official
at the Federal Reserve. On the Arkansas front, Hayes was
quite open in telling me he was going to nail Jim Guy
Tucker to the wall, and over the following year I watched
him do just that. One might assume from such a
statement that Hayes was a Republican, out to get
Democrats. But in fact Hayes' father had been a local
Democrat party official, and Hayes had been a friend and
admirer of John Kennedy. Hayes was not political in that
sense, any more than I was.

Some people have a strange habit of trying to
interpret everything in political terms. When I first spoke
to Sarah McClendon, she asked me, "Why are people
saying all these things about Clinton, and they aren't
saying anything about George Bush?" I refused to bite. I
told her I didn't give a shit about the difference between
Republicans and Democrats--that this was about
criminality, not about partisan politics. Some people--
Republican or Democrat--are honest, and some are not.
Sarah herself kept referring to the Clintons (Bill and Hill)
as "virgins," which amused me to no end. But my interest
was not partisan, and never has been.

In a contrary vein, Jack Blum, who recently joined
Jim Leach's House Committee on Banking as an
investigator (and who quickly recommended they drop
their Mena investigation), told Marianne Gasior that I was
a right-wing nut because of what I had written about Bill
and Hillary Clinton. Marianne said, "I don't think so,"
and read off my resume. Blum's response: "You're
kidding." Gasior was politically a liberal Democrat, and
when she was pursuing a case against Kennametal, which
had done business with Iraq during the Gulf War, she
received some support from Democrat politicians,
because the issue was embarrassing to Republican
interests. Time Magazine did a write-up of her efforts ("A
Matter of Honor," June 21, 1993). But when she began to
ask questions about what Hillary Clinton was doing on
the board of Lafarge Corporation, which was part of the
same smuggling network, Democrat support for her
research quickly evaporated (see "Whatever Happened to
Iraqgate?", The American Spectator, November 1996.)
To the average political hack, partisanship always takes
precedence over the search for truth.

In Wierzynski's case, while supposedly
investigating money-laundering for the House Committee,
he seemed to be actually serving other interests--perhaps
the Pentagon's, perhaps someone else's. Hayes had come
up with financial records showing that fifty to seventy
million dollars a day of drug-related money was being
laundered through the institutions he was looking at.
Wierzynski couldn't understand how such a thing was
possible. He wanted "proof" in a neat little package, say a
memo entitled "Today's Money-Laundering Report". He
seemed to expect to ask a few questions, and then voila!--
the darkest secrets of American political life would be
exposed. So it is not surprising that Wierzynski's
investigation had gone nowhere before Jack Blum arrived
to call the whole thing off. Meanwhile, Wierzynski's son,
in school in England, had been indicted for supplying
information to a group of Russian hackers in St.
Petersburg, who had pulled off a heist of Citibank funds.

Both Wierzynski and Stephen Gannis, the Counsel
for the House Committee on Banking and Finance, were in
touch with a San Francisco attorney named Charles O.
Morgan. Systematics (now a subsidiary of Alltel) had
hired Morgan to lie about its relationship to the NSA, and
Morgan proceeded to do just that. In an April 5, 1995,
letter to Michael Geltner, an attorney for Agora, Inc.,
Morgan wrote: "None of ALLTEL's operations or
subsidiaries has ever had any connection in any capacity
with the Central Intelligence Agency, the National
Security Agency, or any other similar agency in the
United States Government; . . ." But recent documents
obtained under the Freedom of Information Act by The
Washington Weekly from NSA show that, for example,
that "The Arkansas-based security contractor Systematics
Inc. on September 14, 1990 was awarded a $166,000 NSA
contract to build a 'Sensitive Compartmented Information
Facility' (SCIF) in Ft. Gillem, Georgia" (The Washington
Weekly, Nov. 11, 1996).

Morgan similarly denied any connection between
Web Hubbell and Systematics, writing, "Webster Hubbell
never served as an attorney or in any other capacity for
ALLTEL Corporation, or for any of its operations or
subsidiaries, other than a single instance in 1983, when
Systematics, Inc., engaged Mr. Hubbell to pursue a
competitor that was using Systematics, Inc.'s propriety
software without authorization; . . ." But it is a matter of
public record that when in 1978 Jackson Stephens tried to
take over First American bank (later acquired by BCCI),
that the bank sued Systematics along with BCCI, Bert
Lance, and Jackson Stephens. Filing briefs for
Systematics were Webster Hubbell, along with C.J. Giroir
and Hillary Rodham Clinton. (Hubbell subsequently went
to the Justice Department, and then to jail, after receiving
a $500,000 payment for unspecified legal services from
Indonesia's Lippo Group. C.J. Giroir left the Rose Law
Firm and set up a consulting firm to arrange deals
between the Lippo Group and Arkansas-based firms.
Hillary Clinton recently declared her friendship for ex-
Lippo employee and Democrat fund-raiser John Huang,
and was also indicted by grand juries in Little Rock and in
New York in October 1996. These indictments have not
yet been made public.)

But the non-pursuit of the drug-money laundering
trail by the Leach Committee was not surprising. It
stepped on too many toes. Hayes and I agreed that the
U.S. was being rapidly transformed into a narco-republic.
The drug cartels had penetrated the highest levels of the
Justice Department and the FBI, elements of the
intelligence community, and were additionally bribing a
broad assortment of state and federal government
employees and politicians. Even more alarming, the
cartels were now making inroads into the White House.
And the Clinton administration, with lax security
stemming largely from a variety of drug-related issues,
along with a pre-existing legacy of political corruption in
Arkansas, had created a free-for-all playground for
foreign agents. Everything was for sale, from trade policy
to nuclear codes. Moreover, Bill Clinton (or perhaps those
he surrounded himself with, while he partied on the side)
was making rapid progress in turning the FBI and the
Secret Service into a private political police force--a
Gestapo whose duty was to investigate and harass (and
even kill) his political opponents, and to cover up
evidence of his own bad deeds.